Planning permission was granted for over 350,000 new homes in England in 2017, a clear demonstration of the commitment of house builders to deliver even more new homes in the years to come, the latest property pipeline report suggests.
Housing supply has increased by 74% in the past four years with over 217,000 new homes completed last year, meaning the industry is well on track to deliver the Government’s previous housing target of a million homes over the period 2015 to 2020.
But the housing pipeline report from the Home Builders Federation (HBF) and Glenigan says that further improvements to the planning system and the business environment for small house builders will be needed to get closer to the Prime Minister’s 300,000 a year target set for the mid-2020s.
The 351,169 permissions granted in England last year is the highest since HBF and Glenigan started the housing pipeline series in 2006. These will be permissions that are built over the next several years, a positive indicator of future supply levels.
However not all of the permissions will yet be at the stage where builders can actually start work on site and one of the challenges for Government as it revises the National Planning Policy Framework will be to speed up the time it takes to get from an outline permission, when it is agreed to build on a plot of land, to an implementable one, whereby construction work can actually start, the report points out.
Revisions to the NPPF also need to focus on why permissions are increasingly on larger sites as local authorities, faced with financial pressures, seek to minimise the number of areas on which development will take place, it explains.
Whilst the number of plots approved in 2017 was 35% higher than in 2006, there were 3.5% fewer sites permitted last year. With larger sites typically requiring greater upfront capital and more extensive infrastructure, it can take longer for sites to reach peak build out rates, and SME builders are unable to compete for sites.
‘The record number of applications being submitted and approved is a clear demonstration of the industry’s commitment to ramping up housing supply even further than the unprecedented increases of the last four years,’ said Stewart Baseley, executive chairman of the HBF.
He explained that to build more home needs more land to come through the planning system more quickly, and to encompass a broader range of sites. ‘SME builder numbers are down by more than 80% in recent decades as layer upon layer of legislation has worked against small firms and start-ups as well as those delivering specialist housing such as retirement homes,’ he added.
‘The Government should ensure councils are not just taking the easy option and encourage them to grant permissions on a range of sites by type and size rather than merely relying on a few larger sites to meet local housing need,’ Baseley pointed out.
Glenigan’s economics director Allan Wilen said that the residential development pipeline remains strong. ‘The increase in approvals bodes well for potential new housing activity over the coming year as house builders are able to bring forward development on these new sites in response to demand,’ he added.
